Dip in UK car production in March

UK car production was down by more than a quarter (27.1%) in March, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

The year-on-year decline was the first fall since August last year and, said the SMMT, was in line with expectations for a variable year, as manufacturers adjust factories to produce the next generation of cars.

An early 2024 Easter bank holiday also played a part, with fewer working days this March than the year before. 

Mike Hawes, SMMT Chief Executive, said, “This fall is not unexpected given the wholesale changes taking place within UK car factories as existing models are run out and more plants transition to electric vehicle production.

“We can expect further volatility throughout 2024 as manufacturers lay the foundations for a successful zero emission future.

“Recent investment announcements have boosted confidence and enhanced the UK’s reputation but there needs to be an unrelenting commitment to competitiveness.

“Free and fair trade deals must be secured, energy costs reduced and the workforce upskilled if we are to attract further investment to improve productivity and decarbonise automotive manufacturing and its supply chain.”

Volumes for the UK declined marginally, down just 0.3% to 19,995 units, while production for export fell 35.9% to 39,472 units, although more than six-in-10 cars made in March were shipped overseas.

Continuing recent trends, the European Union received by far the bulk of exports (57.9%) followed by the US (11.4%), China (5.9%), Australia (4%) and Japan (1.8%). Shipments to the top five export markets, apart from the US, all fell.

Electrified vehicle (battery electric, plug-in hybrid and hybrid) volumes again represented more than a third of all production (38.4%) with manufacturers producing a combined 22,865 units, although this was down by 29.7% on the year before in part reflecting the issues outlined earlier, notably model changeovers.

Overall, UK car production remained up 1.1% in the first quarter, at 222,371 units, with a 33.9% rise in output for the UK offsetting a 7.4% decline in exports. Despite this fall, by far the majority – 72.7% – of all cars made in Britain in Q1 were for export.

The latest independent production outlook now expects UK car and light van production to fall -6.2% to some 940,000 units this year, mainly due to multiple model changeovers, before returning to growth in 2025.

Output is anticipated to get back above a million units from 2026 and reach 1.2 million before the end of the decade as more EV production comes on stream across the UK.